Vertical Integration and Market Foreclosure in Media Markets: Evidence from the Chinese Motion Picture Industry
Ricard Gil,
Chun-Yu Ho,
Li Xu and
Yaying Zhou
Journal of Law and Economics, 2024, vol. 67, issue 1, 143 - 193
Abstract:
This paper investigates the impact of vertical integration and market foreclosure in media markets. Using theater-movie-day-level data from China, we show that integrated theaters charge lower prices, enjoy higher attendance, allocate more screenings, and run their own movies longer than movies of other distributors. Despite these differences, there is no evidence consistent with anticompetitive input and customer foreclosure in integrated theaters. On the one hand, integrated and independent theaters screen the same share of integrated and independent movies. On the other hand, revenue differences between continued theater-owned movies and discontinued independent movies are inconsistent with customer-market-foreclosure motives given existing differences in distribution incentives between integrated and nonintegrated structures. Finally, we estimate a random-coefficient discrete-choice model of movie demand and show that integrated theaters deliver a higher level of utility with integrated movies than with independent movies through the direct effects of lower prices and more screenings.
Date: 2024
References: Add references at CitEc
Citations:
Downloads: (external link)
http://dx.doi.org/10.1086/727103 (application/pdf)
http://dx.doi.org/10.1086/727103 (text/html)
Access to the online full text or PDF requires a subscription.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ucp:jlawec:doi:10.1086/727103
Access Statistics for this article
More articles in Journal of Law and Economics from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().